Apple reports, China beckons and investors sweat the correction

By Shawn Langlois

My, how quickly it all can change. Just a few short weeks ago, optimism was peaking, early retirements were being planned, margins were swelling and Uber drivers were crowing about their portfolios. This bull market was going to be a feast for a long time.

But after a few hundred points get shaved off the Dow, the mood is about as bright and cheery as Lorde’s performance at the Grammys. R.I.P bull market. Fun while it lasted. Thanks for the memories, and what you did for our 401(k)s.

Credit Suisse analysts aren’t exactly doing much to lift their clients’ spirits, either. They told them that what we’re seeing is, indeed, the beginning of the correction. Yes, THE correction. The telltale signs are the fact that there didn’t appear to be any panic selling Friday, and that nobody bought the dip as the day wound down.

There’s another school of thought, though. Several, actually, but let’s focus here, people. Truth is, there’s no sustained rally without the occasional pause. Of course, this was one hell of a pause, yet as painful as it may have been — and may continue to be — there’s bound to be some opportunity in the wreckage. For those investors not already drained of any means to go fishing, anyway.

“They say recessions are yard sales for the rich. They go and buy condos and homes at half off, fine art gets bid lower, and they are given the opportunity to get even wealthier over time. Here’s your yard sale,” wrote Upside Trader’s Joe Donohue.

In other words, go get yourself some, but you might want to wait until it all shakes out a bit. “There are probably enough folks out there that got paralysis through analysis and never hit the sell button on Friday,” Donohue added. “If we open lower on Monday, (I hope), it should flush out more weak hands.”

Earnings:The world stands still for Apple
/quotes/zigman/68270/delayed/quotes/nls/aaplAAPL today, not just for what we glean from earnings, but also for any developments on the Carl Icahn front. The rascally billionaire famously took to Twitter recently to ramp up his campaign for a bigger stock-repurchase program. He followed up those tweets with a long letter to Apple’s shareholders in which he again pounded the table on why he believes Apple is undervalued and what the board must do to remedy this.

The chart of the day:Davos gets beaten up for being a big puff of hot air, an exercise in puffery for rich and powerful people to ingratiate themselves with richer and powerful-er people. According to this illustration from The Economist over the weekend, it’s actually more harmful than that. Take a look at how the 104 companies that regular send attendees to the boondoggle fare relative to the rest of the market.

The call of the day: If U.S. stocks aren’t your thing (and who could blame you after last week’s mess?), it’s time to start buying up stocks in China, particularly media, health care and Internet, according to Citi Private Bank strategist Ken Peng. “Right now, valuations are extremely low, and China’s not really in a crisis,” he told CNBC in an interview. “Every year you end up having these mini-cycles where [the] market reaches panic and comes back to reasonable valuations and then starts worrying about growth again.” We’re just leaving panic at this point, he advised.

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Need to Know (NTK) guides investors to the most important, insightful items required to chart a course ahead of each trading day. Anchored by lead writer Shawn Langlois, NTK will sift through the fire hose of news, commentary and data, from traditional and non-traditional sources, and extract what’s most essential. You can start reading NTK here as it begins publishing at approximately 6:30 a.m. ET, or sign up here to get a version in your email box every morning at approximately 8:45. a.m. ET.